The market just cannot get a rally together that is strong enough to erase the oversold conditions. There is now resitance at 1335, where the rally failed this week.

Equity-only put-call ratios continue to plow higher on their charts. They remain on sell signals.

Market breadth has been quite negative, and that is one of the major oversold conditions.

Volatility indices ($VIX and $VXO) have remained stubbornly high. As long as $VIX is above 21, that is bearish for stocks.

In summary, the oversold conditions persist and should still be able to generate a sizeable rally. But as long as intermediate-term indicators remain negative, any such rallies will be short-lived.

Lawrence G. McMillan is the author of two best selling books on options, including Options as a Strategic Investment, and also publishes several option trading newsletters.